$BTC Plummets Below $87,000 After Trump Announces Strategic Bitcoin Reserve – Expectations Not Met?

Bitcoin's price plunged below $87,000 Thursday night after U.S. President Donald Trump signed an executive order establishing a strategic Bitcoin reserve, raising questions on why the world's most valuable cryptocurrency was plummeting on such wonderful news.

Data from CoinGecko showed that BTC was down nearly 5% in the day and at one point plunged below $85,000. The coin has since recovered to around $87,000 but is still in the red.

Everything to Know About the US Bitcoin Reserve

Trump signed the executive order Thursday to the joy of Bitcoiners and other crypto users. White House crypto and AI czar first announced the news on X, and the government later published a fact sheet on the reserve.

As per the fact sheet, there are two separate things the executive order will establish:

• National Strategic Bitcoin Reserve

The reserve "will be capitalized with Bitcoin owned by the Department of Treasury that was forfeited as part of criminal or civil asset forfeiture proceedings." Also, other government agencies have been ordered to evaluate whether they have legal authority to transfer any BTC they hold to the reserve. The Treasury and Commerce chiefs will develop "budget-neutral strategies for acquiring additional Bitcoin." The country will "not sell" BTC deposited into the reserve as the assets will be "maintained as a store of reserve assets."

• National Digital Asset Stockpile

Unlike the BTC reserve, the stockpile will not involve government purchases. Instead, the stockpile will only consist of digital assets "other than Bitcoin owned by the Department of Treasury that was forfeited in criminal or civil asset forfeiture proceedings."

Government agencies are expected to provide a full accounting of their cryptocurrency holdings to the Treasury and Trump's Working Group on Digital Asset Markets.

Why is Bitcoin Plunging Over the News?

Despite continuing celebrations across social media over the big news, Bitcoin has not surged unlike its price reaction to the approval of spot BTC exchange-traded funds (ETFs) and Trump's electoral win in November.

Thoughtful Money Founder Adam Taggart was among the industry observers who wondered why BTC didn't move. He asked whether it's because the digital coin is "being capitalized with Bitcoin the government already possesses" versus purchasing new coins.

One user said it could be because the market had "wild expectations," specifically that the U.S. will immediately start buying Bitcoins for its reserve "with new money."

It remains to be seen whether BTC will start recovering soon, especially as more people discuss developments around the Trump administration's historical move.